Philpot reports on gloomy March

EUROPE – Philpot, the ingredients arm of UK dairy processor Dairy Crest, has reported poor commodity prices in March.

However, the company said that there was confidence that the skimmed milk powder (SMP) market will see a recovery in prices after export refund increases, introduced from 1 March, start to have an effect.

The report said that European butter prices continue to stay around intervention levels. Although prices in the UK recovered a little, the strong pound meant market returns saw little change. As a result, Philpot predicted that butter intervention will reopen soon.

According to the report, cheese prices steadied towards the end of March following a fall. However, it claims that prices for mild cheddar remain under pressure.

In the report, Philpot stated that some manufacturers have either cut back cheese production or switched to butter or SMP to correct their stockholding position. The report claimed that the result is a continued rise in whey prices, with production at low levels and export demand high.

However, Philpot claimed that reported prices of up to 654 euro per tonne would not be sustained.